The team at Morgans has been busy picking out its best ASX share ideas for December.
These are the shares that its analysts think offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence.
The first two shares we looked at can be found here. Read on for the next two:
ResMed Inc (ASX: RMD)
This sleep treatment focused medical device company has been named as one of Morgans' best ideas.
Morgans likes ResMed largely due to its strong position in digital health. It is expecting the company's portfolio of cloud-connected products to be a key driver of growth in the future. The broker explained:
While we expect the next few quarters to be volatile as COVID-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.
Morgans currently has an add rating and $37.00 price target on ResMed's shares.
Westpac Banking Corp (ASX: WBC)
If you're looking for banking sector exposure then Morgans thinks that Westpac could be the way to do it.
The broker believes that Australia's oldest bank is well-placed to deliver the strongest return on equity improvement thanks partly to its major cost cutting plans. Its analysts expect this to support attractive dividend yields. It commented:
We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.
Morgans has an add rating and $25.80 price target on the bank's shares.
